Citi Lowers Natural Gas Price Forecasts Amid Easing Middle‑East Tensions
Citi has revised its outlook for major natural‑gas benchmarks downward, attributing the change to a recent sell‑off and a perceived reduction in geopolitical risk in the Middle East. On June 11, TTF (Title Transfer Facility) and JKM (Japan Korea Marker) prices fell 15 % to 20 % from their intraday peaks, prompting the bank to anticipate further price weakness.
The bank’s new price targets are as follows:
- TTF: an average of $12.4 per MMBtu for the second half of 2026 and $9.2 per MMBtu for 2027.
- JKM: $13.5 per MMBtu for the second half of 2026 and $9.5 per MMBtu for 2027.
- U.S. Henry Hub: $3.2 per MMBtu for the second half of 2026 and $2.8 per MMBtu for 2027.
Citi highlighted several underlying factors driving the bearish outlook. Asian LNG imports remain weak, while China’s hydro‑electric generation continues to be strong, reducing regional demand for gas. Water flows to Southeast Asia have increased, further supporting hydro‑electric output. The bank also noted that a likely El Niño winter pattern could dampen demand, challenging earlier constructive price expectations.
Regarding the U.S. market, Citi pointed to timing considerations. Although summer demand had recently lifted Henry Hub prices, the bank expects abundant supply from the Permian and Haynesville basins in the second half of 2026 and 2027, which should ease supply fundamentals and keep prices subdued.
Overall, the forecast revisions reflect Citi’s view that easing Middle‑East tensions, combined with weak Asian demand and robust U.S. production, will keep natural‑gas prices on a downward trajectory through 2027.